California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Given that this deficit is estimated to range from $20  billion to $35  billion in the years ahead, addressing it gradually, rather than all at once, reduces fiscal disruption and more readily provides for legislative input and flexibility.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: Overview of the Governor's Budget

Jan 12, 2026 - On a technical basis, it can be thought of as the end balance of the state ’s General Fund —the money that remains after accounting for all of the state ’s expected revenues and spending. The State Constitution has a balanced budget requirement, which means the balance of the SFEU must be set above zero for the upcoming fiscal year.
https://lao.ca.gov/Publications/Report/5101